Figuring out Demand and Competition for your Product Idea

Welcome back! In part one of this lesson we discovered why it is important to validate a business/product idea. But enough of the why, let’s get on with it and work out if your idea is actually a good one!

There are lots of factors you could look at to validate your craft idea but in the interest of keeping it simple, we need to know two things about your product.

How much demand is there?

How much competition is there?

Sounds simple but how do you go about figuring out demand and competition for your product idea? I have a few ideas that will help –

Demand

Our goal here is to make sure there are people that want to buy the product that you want to sell. A couple of great ways to do that are –

Social Proof

Pinterest

Jump onto Pinterest and type the product into the search box. Take a look at the search results.

How many likes and re-pins do they have? Lots or just a few?

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For example, the above piece of jewellery has been repined and liked a heap of times. That is a possible sign of good demand for that product.

You can do similar searches on Facebook, Twitter or anywhere that people could be talking about or sharing the product.

Facebook

Check out your the local community noticeboards or Buy, Swap and Sell Facebook pages. Guaranteed there will be at least one for your town/city if not more. This is where other local people (just like you and I) are advertising and selling there products. Take notice of what posts get the most likes, shares and comments. Are there items that are more popular than others?

Where I live there are at least 4 ladies who constantly advertise their cupcakes for sale and another 2 who sell cheesecakes. And they do a roaring trade. In my town there is definitely demand for sugar!

Other Online Tools

Etsy

Etsy has the ability to show you what items are currently trending and popular. Does your item appear in the results?

Google Keyword Planner

This is a great tool to help quantify how many internet searches are being done for your product per month. You will need to create a free adwords account to use this service and then do the following;

1. Click ‘Search for new keyword and ad group ideas‘

2. Enter the name of the item you will be selling e.g votive candles and click Get Ideas.

3. Once the results show up, click the Keyword Ideas tab. You will see your search keyword average monthly searches as well as other related keywords that Google deems appropriate. When just getting started I tend to be happy with a keyword that has 300 plus searches per month especially if there is a heap of other related keywords as well.

Offline

As always, remember it pays to take your research offline. Especially with a craft business. People still like to touch and feel these items before they buy.

Visit your local markets and check out the displays. What craft/handmade stalls are busy? How are they set up? Are they doing anything different to the others?

CONCLUSION – At the end of your research are you confident that there are people out there that want to buy your product? You don’t need to have a huge audience, just enough to know that there are potential customers out there.

Competition

Our goal in assessing our competition is to make sure there is a healthy amount of competition out there. Not too much but enough to let us know that your item is in demand. Put simply, I would be worried if there was no competition for your product idea because it could mean there is no demand for it and no money to be made.

Social Proof

Check out the same platforms that you looked at when researching demand. How many people are targeting your market with similar items?

Facebook

Using the example of the cake ladies in my town again, I notice that the cheesecakes, which are more expensive, get snapped up a lot faster than the cupcakes. This could suggest that the competition for the cupcakes is medium to high, while the competition for the cheesecakes is low to medium. The ladies with the cupcakes have to work harder and put more effort into their marketing than the cheesecake makers.

This $50 cheesecake sold in 1 minute!!

Other Ideas

Google Keyword Planner

This is such a great tool as not only does it show you how many people are searching for a keyword, it will indicate the level of competition you face from others targeting the same keywords.

You will find the competition data right next to the average monthly searches. Now, don’t be discouraged if all of your keywords have high competition like the example below. Check your settings on the left hand side of the page and make sure you are targeting your country only and not the whole world. If you competition is still high it could be a sign you need to rethink your product idea.

CONCLUSION – Targeting high competition keywords and products is tough business and might be best left until you have more experience under your belt. You are looking for keywords that have medium to low competition in your country and don’t be afraid to choose a different product if all the signs are pointing at a tough, competitive market.

Now to test the market!

Sometimes research can only take you so far. You’ve now hit the point of having done the logical research for your idea, the next step is to just do it. Time to go with your gut and take action!

Once you have your business up and running the work doesn’t stop there. Talk to your customers, find out what they need. Ask questions, check out relevant forums and Facebook groups. Never stop validating your ideas!

Comments

Have you looked at “My” site “Tinkerbelles and Beaus” on etsy? There are other stores who have very similar items (some the same) But they have sold way more than I have. (Zadabug) for one. Maybe you could help me know why. I thought for $20.00 this would be more personal.
Thank you,
Margie Cullen

Thank you so much for this series of posts! My sister and I have been dreaming of starting an Etsy store, but were stalled -not knowing where to begin, I suppose. However, I am now confident that the resources, tools and instruction you provide are a formula for success.
Thank you, again!!

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Hi, I'm Kat! I help Etsy sellers make more money! If that sounds good to you, well, you're in the right place! We have also just added a super amazing Etsy Seller to the Crafter Coach family...More about us.